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Former Directors of Pennzoil-Quaker State Vindicated in Shareholder Trial Win

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HOUSTON, November 9, 2005 -- A jury in the 295th Civil District Court of Harris County, Texas recently returned an 11-1 verdict in favor of the former directors of Pennzoil-Quaker State Company in a shareholders’ class-action lawsuit arising from the sale of Pennzoil to Shell Oil Company.

In 2002, Shell approached Pennzoil about a potential acquisition. Pennzoil, represented by Baker Botts, negotiated a sale of the company for $22 per share, a 42 percent premium over the $15.49 per share market price the day before the announcement of the transaction. This lawsuit was filed shortly thereafter, alleging that the directors breached their fiduciary duties to the shareholders in connection with the proposed transaction.

Plaintiffs sought to enjoin a shareholder vote to approve the transaction, but Baker Botts successfully defended the Pennzoil directors at the injunction hearing. The transaction was approved by more than 99 percent of shares voted.

Subsequently, the court certified Peter Elloway as a representative of the plaintiff shareholders class. Plaintiffs contended that the directors failed to disclose all material information to the shareholders prior to their vote approving the transaction. Plaintiffs also alleged that the directors violated their fiduciary duties of due care and loyalty to the shareholders by recommending the sale of the company, and in allegedly enhancing the change-in-control benefits for certain officers. Plaintiffs requested damages in the amount of $7.50 per share – which would have resulted in an award in excess of $610 million.

After a three week trial, the jury deliberated for just over one day and returned a verdict in favor of all the Pennzoil directors.

The Pennzoil directors were represented at trial by James Edward Maloney, Michael C. Massengale, and Rebeca Aizpuru Huddle.

To request interviews with either James Maloney or Michael Massengale, please contact Michael Cinelli, PR Specialist for Baker Botts, at 713.229.1764 or by e-mail at mike.cinelli@bakerbotts.com.

About Baker Botts

Baker Botts L.L.P., founded in 1840, is a leading international law firm with offices in Austin, Dallas, Dubai, Hong Kong, Houston, London, Moscow, New York, Riyadh and Washington. With more than 650 lawyers, Baker Botts provides a full range of legal services to regional, national and international clients.  For more information, please visit www.bakerbotts.com.

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